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Why Is MercadoLibre (MELI) Up 22.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for MercadoLibre (MELI - Free Report) . Shares have added about 22.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MercadoLibre due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
MercadoLibre reported third-quarter 2023 earnings of $7.16 per share, which surpassed the Zacks Consensus Estimate by 22.39%. The company reported earnings of $2.56 per share in the year-ago quarter.
Revenues surged 39.8% on a year-over-year basis (69.1% on a FX-neutral basis) to $3.76 billion. The top line surpassed the Zacks Consensus Estimate by 5.22%.
Total revenues were driven by accelerating commerce and fintech revenues, which grew 45% and 33% year over year, respectively.
Revenues from MELI’s advertising services grew more than 70% on an FX-neutral basis and were equivalent to almost 1.7% of gross merchandise volume (GMV) at the end of the third quarter.
Increasing total payments volume (TPV), courtesy of the robust Mercado Pago, aided the company. MercadoLibre’s rising GMV remained another positive. Strong shipment growth also contributed well to the reported results.
Quarter in Detail
Brazil: Net revenues in the third quarter came in at $2 billion (53.4% of the total revenues), rising 40.2% year over year.
Argentina: The market generated revenues of $825 million (21.9% of the top line), which surged 22.2% year over year.
Mexico: Net revenues in the reported quarter were $772 million (20.5% of the total revenues), which soared 66% year over year.
Other countries: The markets generated revenues of $157 million (4.2% of the total revenues), reflecting an increase of 31.9% on a year-over-year basis.
Key Metrics
GMV of $11.36 billion jumped 59.3% on an FX-neutral basis year over year. The figure surpassed the consensus mark by 3.51%.
The number of successful items sold was 357 million, up 25.7% year over year. The number of successful items shipped rose 26.8% year over year to $350 million.
TPV surged 121% year over year on a FX-neutral basis to $47.3 billion. This was driven by the strong performance of Mercado Pago. The figure beat the Zacks Consensus Estimate by 8.06%.
Off-Marketplace TPV was more than $35.3 billion, up 145% year over year on an FX-neutral basis.
TPV on the marketplace was 11.97 billion, up 31.7% year over year. Total payment transactions increased 74.3% year over year to $2.51 billion.
Unique active users totaled 120 million, up 36.4% year over year and beat the Zacks Consensus Estimate of 104 million.
Operating Details
For the third quarter, the gross margin was 53.1%, expanding 295 basis points (bps) year over year.
Operating expenses were $1.31 billion, which increased 24.5% year over year. As a percentage of revenues, the figure declined 430 bps year over year to 34.8% in the reported quarter.
The operating margin was 18.2%, expanding 724 bps year over year.
Balance Sheet
As of Sep 30, 2023, cash and cash equivalents were $2.17 billion, up from $1.86 billion as of Jun 30, 2023.
Short-term investments were $3.32 billion as of Sep 30, 2023, up from $2.8 billion as of Jun 30.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 14.52% due to these changes.
VGM Scores
At this time, MercadoLibre has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise MercadoLibre has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
MercadoLibre is part of the Zacks Internet - Commerce industry. Over the past month, Match Group (MTCH - Free Report) , a stock from the same industry, has gained 11%. The company reported its results for the quarter ended September 2023 more than a month ago.
Match Group reported revenues of $881.6 million in the last reported quarter, representing a year-over-year change of +8.9%. EPS of $0.57 for the same period compares with $0.58 a year ago.
Match Group is expected to post earnings of $0.50 per share for the current quarter, representing a year-over-year change of +66.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -11.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Match Group. Also, the stock has a VGM Score of B.
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Why Is MercadoLibre (MELI) Up 22.8% Since Last Earnings Report?
It has been about a month since the last earnings report for MercadoLibre (MELI - Free Report) . Shares have added about 22.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MercadoLibre due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
MercadoLibre's Q3 Earnings Beat, Revenues Rise Y/Y
MercadoLibre reported third-quarter 2023 earnings of $7.16 per share, which surpassed the Zacks Consensus Estimate by 22.39%. The company reported earnings of $2.56 per share in the year-ago quarter.
Revenues surged 39.8% on a year-over-year basis (69.1% on a FX-neutral basis) to $3.76 billion. The top line surpassed the Zacks Consensus Estimate by 5.22%.
Total revenues were driven by accelerating commerce and fintech revenues, which grew 45% and 33% year over year, respectively.
Revenues from MELI’s advertising services grew more than 70% on an FX-neutral basis and were equivalent to almost 1.7% of gross merchandise volume (GMV) at the end of the third quarter.
Increasing total payments volume (TPV), courtesy of the robust Mercado Pago, aided the company. MercadoLibre’s rising GMV remained another positive. Strong shipment growth also contributed well to the reported results.
Quarter in Detail
Brazil: Net revenues in the third quarter came in at $2 billion (53.4% of the total revenues), rising 40.2% year over year.
Argentina: The market generated revenues of $825 million (21.9% of the top line), which surged 22.2% year over year.
Mexico: Net revenues in the reported quarter were $772 million (20.5% of the total revenues), which soared 66% year over year.
Other countries: The markets generated revenues of $157 million (4.2% of the total revenues), reflecting an increase of 31.9% on a year-over-year basis.
Key Metrics
GMV of $11.36 billion jumped 59.3% on an FX-neutral basis year over year. The figure surpassed the consensus mark by 3.51%.
The number of successful items sold was 357 million, up 25.7% year over year. The number of successful items shipped rose 26.8% year over year to $350 million.
TPV surged 121% year over year on a FX-neutral basis to $47.3 billion. This was driven by the strong performance of Mercado Pago. The figure beat the Zacks Consensus Estimate by 8.06%.
Off-Marketplace TPV was more than $35.3 billion, up 145% year over year on an FX-neutral basis.
TPV on the marketplace was 11.97 billion, up 31.7% year over year. Total payment transactions increased 74.3% year over year to $2.51 billion.
Unique active users totaled 120 million, up 36.4% year over year and beat the Zacks Consensus Estimate of 104 million.
Operating Details
For the third quarter, the gross margin was 53.1%, expanding 295 basis points (bps) year over year.
Operating expenses were $1.31 billion, which increased 24.5% year over year. As a percentage of revenues, the figure declined 430 bps year over year to 34.8% in the reported quarter.
The operating margin was 18.2%, expanding 724 bps year over year.
Balance Sheet
As of Sep 30, 2023, cash and cash equivalents were $2.17 billion, up from $1.86 billion as of Jun 30, 2023.
Short-term investments were $3.32 billion as of Sep 30, 2023, up from $2.8 billion as of Jun 30.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 14.52% due to these changes.
VGM Scores
At this time, MercadoLibre has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise MercadoLibre has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
MercadoLibre is part of the Zacks Internet - Commerce industry. Over the past month, Match Group (MTCH - Free Report) , a stock from the same industry, has gained 11%. The company reported its results for the quarter ended September 2023 more than a month ago.
Match Group reported revenues of $881.6 million in the last reported quarter, representing a year-over-year change of +8.9%. EPS of $0.57 for the same period compares with $0.58 a year ago.
Match Group is expected to post earnings of $0.50 per share for the current quarter, representing a year-over-year change of +66.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -11.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Match Group. Also, the stock has a VGM Score of B.